Although transactions are increasingly executed online and using transaction cards, negotiable instruments continue to be used for executing transactions. A negotiable instrument, such as a check, includes an instruction of a customer of a financial institution. The instruction may include an order instructing the financial institution to pay an amount to a payee.
A financial institution that is subject to an order to pay the amount may be a drawee bank. The customer that orders the drawee bank to pay the amount may be a drawer or a payer.
The payee may receive the check as payment for services or goods provided to the payer. The payee may receive the check directly from the payer.
The check may be issued by a bill-pay vendor. The bill-pay vendor may provide check issuing services to the payer. The bill-pay vendor may receive instructions from the payer. The instructions may direct the bill-pay vendor to generate one or more paper checks. The bill-pay vendor may transmit the paper check to the payee.
The payee may present the check received from the bill-pay vendor for deposit at a depositary financial institution (hereinafter, “depositary bank”). The payee may request that the amount noted on the check be credited to an account of the payee. The depositary bank may provide financial services to the payee. A service provided by the depositary bank may include processing of a check issued by the payer.
Processing of a check may include receiving a check from the payee. Processing may include receiving a request from the payee to credit an account of the payee. The credit may correspond to a handwritten amount indicated in a segment of the check.
The depositary bank may receive the check and transmit a copy of the check to the drawee bank. The depositary bank may request that the drawee bank transfer funds to the depositary bank. The funds may correspond to the amount indicated on the check. The funds may be credited to an account of the payee held at the depositary bank.
The drawee bank may provide services to the payer. The services may include check services. The check services may include fraud detection services. The popularity of checks has been accompanied by check fraud. Check fraud may include a printing of a check that is not authorized by the payer or the bill-pay vendor. Check fraud may include presenting an unauthorized check for deposit.
Upon receiving the copy of the check, the drawee bank may attempt to assess an authenticity of the check. To assess authenticity, the drawee bank may attempt to detect a fraudulent check. A fraudulent check may be detected by examining one or more segments of a check template. For example, upon inspection, a signature segment of a check template may include a signature that does not correlate to a known signature of the payer. A visual inspection of the check may indicate that a numerical segment stating the amount may not correlate to a segment describing the amount in words.
Check services provided by a depositary or drawee bank may include presenting a deposited check to the payer or payee for confirmation. Check services may include stopping payment on a check or temporarily suspending processing of the check. Check services may include, prior to debiting an account of the payer, reconciling a deposited check with a ledger of checks maintained by the drawee bank on behalf of the payer. Check services may include filtering deposited checks for suspicious or out of pattern checks.
Various check services provided by the drawee bank may streamline a processing of checks and reduce incidents of check fraud. However, a drawee bank may not have access to all checks issued in the name of the payer. For example, check issued on behalf of the payer by a bill-pay vendor may not be available to the drawee bank. The drawee bank may be unable to provide a variety of check services to the payer.
It would be desirable to provide a treasury management system that provides check services independent of an issuing source of a check. It would be desirable, therefore, to integrate apparatus and methods for bill-pay services into a treasury management system.